Second Job Tax Rate - Can excess tax be refunded?

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Forums › Finance and wealth management › Second Job Tax Rate - Can excess tax be refunded?

AidanS

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#153582 1-Oct-2014 23:01

Hi guys,

So I currently work a part time job on a casual contract (currently at High School) however I'm looking at picking up a second part time job over the summer holidays. I know for a second job, you get a charged a much higher tax rate which I'm not bothered about, my problem is whether or not I can claim this in an annual tax refund.

Say for example:
- Job 1 = $7k annual gross income @ 10.5% tax
- Job 2 = $7k annual gross income @ 20%+ [?] tax rate

Net income = $14k = 10.5% raw tax rate.

Can I claim back the >10.5% tax on job 2, or is this tax non refundable?

Thanks in advance for help!
A.

tardtasticx

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#1145210 1-Oct-2014 23:06

I think they should just refund you when you request a PTS next year. I've overpaid my tax at every job I've ever had, be it student loan repayments, wrong tax code or whatever and they've just given it back without a hassle. I don't think I even had to specify what was overpaid. They calculated it based on the tax paid and who paid it etc

Boeingflyer

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#1145214 1-Oct-2014 23:10

Employee's are charged PAYE (pay as you earn) tax. You can think of this as schedule payments throughout the year to settle your tax bill at the end of the year. The reason secondary tax is higher than normal is because you are more than likely to move up the tax brackets when you add your two jobs together and therefore it is better to pay more than to get a tax bill shock at the end of the year.

Is that simple enough? Can go into more detail and give you an example if you want.

AidanS

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#1145217 1-Oct-2014 23:15

Fabian: Employee's are charged PAYE (pay as you earn) tax. You can think of this as schedule payments throughout the year to settle your tax bill at the end of the year. The reason secondary tax is higher than normal is because you are more than likely to move up the tax brackets when you add your two jobs together and therefore it is better to pay more than to get a tax bill shock at the end of the year.

Is that simple enough? Can go into more detail and give you an example if you want.

Ahh, that makes sense, so essentially there's no "special rule" for second jobs it's "just in case". So I can claim back any over paid tax if I'm entitled to it?

Cheers,
Aidan.

ckc

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#1145233 1-Oct-2014 23:31

Here are your secondary tax rates:

http://www.ird.govt.nz/how-to/taxrates-codes/earning-income-secondary-special-codes.html

Your secondary job is the one you earn the least at, regardless of whether or not you've been working there longer. At the end of the tax year, get a personal tax summary as above and you should be in line for a refund.

graemeh

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#1145324 2-Oct-2014 09:01

AidanS: Ahh, that makes sense, so essentially there's no "special rule" for second jobs it's "just in case". So I can claim back any over paid tax if I'm entitled to it?

Yes you can. You can also request a "special tax code" from IRD and they will tell the employer exactly what percentage to deduct.

If you want to look in to this the IRD form used to be called an "IR23 BS" and probably still is.

The special tax code relies on your being able to accurately estimate your annual income. You should still check at the end of the year to ensure you've paid the right tax.

AidanS

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#1145387 2-Oct-2014 09:59

Awesome, thanks for the help guys!

-A.

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Geektastic

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#1145758 2-Oct-2014 16:34

Just ignore 'secondary' and 'primary'. It causes too much confusion.

You pay tax on your overall taxable income each year whether you earned it from one job or 100 jobs. If you overpay, IRD will refund your overpayment.

There is no special punitive rate merely because you have another job. That would be silly!

graemeh

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#1145773 2-Oct-2014 16:41

Geektastic: If you overpay, IRD will refund your overpayment.

You do have to ask them for the refund though, if you don't ask they won't automatically refund.

Geektastic

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#1146590 3-Oct-2014 13:29

graemeh:
Geektastic: If you overpay, IRD will refund your overpayment.

You do have to ask them for the refund though, if you don't ask they won't automatically refund.

That's probably true. However my accountants do that bit..!

graemeh

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#1146631 3-Oct-2014 14:12

Geektastic:
graemeh:
Geektastic: If you overpay, IRD will refund your overpayment.

You do have to ask them for the refund though, if you don't ask they won't automatically refund.

That's probably true. However my accountants do that bit..!

Yes that is one thing that I find accounts are good at, the other thing I find they are good at is sending bills!

rayonline

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#1147436 4-Oct-2014 23:18

Normal Joe bloggs not worth an accountant. Day job or two or a few part time or temp contract. As first time contractor. I just started my first GST return. Not hard but you have to keep receipts n pay slips.

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raytaylor

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#1147458 5-Oct-2014 02:43

rayonline: Normal Joe bloggs not worth an accountant. Day job or two or a few part time or temp contract. As first time contractor. I just started my first GST return. Not hard but you have to keep receipts n pay slips.

Tip: Google drive app for android allows you to scan reciepts and invoices. Its wonderful and keeps my accounting dragon lady happy.

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hio77

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#1147464 5-Oct-2014 03:07

raytaylor:
rayonline: Normal Joe bloggs not worth an accountant. Day job or two or a few part time or temp contract. As first time contractor. I just started my first GST return. Not hard but you have to keep receipts n pay slips.

Tip: Google drive app for android allows you to scan reciepts and invoices. Its wonderful and keeps my accounting dragon lady happy.

Interesting. i did not know it had that feature.

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Geektastic

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#1147496 5-Oct-2014 08:42

rayonline: Normal Joe bloggs not worth an accountant. Day job or two or a few part time or temp contract. As first time contractor. I just started my first GST return. Not hard but you have to keep receipts n pay slips.

It depends on whether you want advice on the best way to structure yourself in relation to taxation.

There are all kinds of things you can do which may be handy and which you may never figure out without an accountant's help. Don't assume they cannot be of benefit.